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Supplemental Health Insurance Guide
What is Supplemental Health Insurance?
Supplemental health insurance is coverage that pays for costs above and beyond what standard health insurance policies will cover. And in some cases, may pay coinsurance, copays, and deductibles. This type of insurance includes long-term and short-term disability, critical illness, long-term care, recovery care, hospital indemnity, accident, dental, vision, travel, and prescription plans. The policies will pay benefits to either the insured or to the healthcare provider. And you can spend the cash any way you choose if it is paid to you and not directly to your healthcare provider.
How Does Critical Illness Insurance work?
Critical Illness Insurance is a type of policy that provides a cash benefit paid to you if you are diagnosed with and need treatment for a heart attack, stroke, or cancer. And receiving this benefit will have nothing to do with how much your primary health insurance plan pays for your medical costs. Benefit amounts can range from $5,000 to $500,000 depending on the amount of coverage chosen. Critical illness insurance is often paired with traditional life insurance, disability income insurance, as well as accident & hospital indemnity insurance to ensure income is replaced to provide for the insured and/or the insured’s family in the event of any major accident, injury, illness, or death of the insured.
Can anyone get Disability Income insurance?
Unfortunately, there are some occupations that are not eligible for disability income insurance. Also, there are age limits for both eligibility for coverage and for when policy benefits can be paid. For example, a benefit could continue pay out until the insured reaches age 67, which is currently the maximum age that can be selected for a long-term disability income benefit period. Currently, benefit periods can be 2 years, 5 Years, 10 years, to age 65, or to age 67. Waiting periods can be 30, 60, 90, 120, or 180 days. And on top of that, you must also be medically eligible for a disability income plan.
Does the government provide financial assistance for disability?
Yes, if you qualify as disabled, the government will pay you disability income. On the Social Security Administration (SSA) website, it claims the time frame to receive benefits after applying is “3 to 5 months”. Unfortunately, many applicants state that they have ended up waiting anywhere from 6 months to 2 years before finally receiving benefits. This can be extremely inconvenient if you are one of the unlucky individuals who is not fast-tracked or is lost in the shuffle of applications. But if you instead purchase an individual disability income plan with an insurance carrier, you can select a 30, 60, 90, 120, or 180 day waiting period which can prevent you from having to gamble on the waiting time to receive your benefits. Now, a key thing to remember is that most insurance carriers do not pay out their benefit if you are also receiving disability from the government. But there are insurers that offer the option to receive benefits from both the government and the insurer at the same time. These plans will cost more but are well worth it. Also, benefits cannot exceed 70% of your adjusted gross income. For plans with benefits above $5,000 per month there will be financial underwriting on top of the medical underwriting to verify your actual income. And most insurance carriers will offer simplified and express-issue underwriting that doesn’t require a medical exam for benefit amounts of $3,000 per month or less.
Is employer-sponsored health insurance all I need?
In some cases, it could be, but for most you will need additional coverage to fill in any gaps. Sometimes there are deductibles, coinsurance, prescription costs, as well as copayments that make the employer-sponsored health insurance not as useful as intended. In these cases, supplemental health plans would greatly improve financial protection against unexpected medical expenses, especially if you have frequent visits to your medical provider. Either way, it is always best to review your current policies to ensure you are fully protected by knowing exactly what your benefits are and what exclusions will apply.
What other plans could benefit me?
Short-Term Limited Medical Plans are intended for people who only need insurance for a short period (a few months) before longer term insurance is obtained, usually through their employer. So, this is most often purchased to fill a gap in coverage when transitioning between jobs, as most employers usually require anywhere from 90-180 days of employment before providing health insurance to their employees. Also, short-term limited medical plans, typically, costs less and have a shorter application process.
Accident & Hospital Indemnity Insurance would provide a fixed daily, weekly, or even monthly benefit while the insured is confined in a hospital. The payment would not be dependent on actual hospital charges, but instead a fixed flat dollar amount. Benefits are paid in addition to any other benefits that may be available and are typically used to pay out of pocket and non-covered expenses associated with your primary medical plan. They can also help with additional expenses incurred while in the hospital.
Healthcare Indemnity Insurance is an expanded version of accident & hospital indemnity plans that include benefits for surgical, physician, and other outpatient services. However, they are not meant to replace traditional health insurance plans as they are not considered “catastrophic insurance plans”. Healthcare Indemnity plans allow basic coverage to provide benefits for day-to-day healthcare, such as doctor visits, preventative care, injections, diagnostic testing (x-rays), nuclear testing (MRI, PET, CAT Scan), and prescriptions, but at a much more affordable price than traditional health insurance plans.
Long-Term Care Insurance reimburses the policyholder for the cost of custodial care services due to the loss of functioning due to age, disability, or chronic illnesses. It has similarities that overlap with long-term disability, but the primary difference is that it covers the costs of certain types of chronic care in the event it is warranted. Long-term disability pays out its benefit in the event you are unable to work, or depending on additional riders, your ability to perform a specific job.
Recovery Care, also known as short-term care or skilled nursing/post-acute rehabilitation is provided for patients recovering from surgery, illness, or an injury that is expected to improve over a short period of time such as 6 months to a year. This gives people the freedom to choose how they want to recover and where. They can choose the provider, hospital, nursing facility, assisted living, as well as have access to home care (depending on their plan).
Dental insurance plans will cover some portion of regular appointments for preventative care as well as a portion of the cost for fillings, crowns, root canals, oral surgery including tooth extractions. In some plans, orthodontics, periodontics, (the structures that support and surround the tooth) and prosthodontics (dentures and bridges) partially covered as well.
Vision Insurance, also referred to as Vision care insurance, provides coverage for routine eye care. Generally combined with Dental or other supplemental health insurance plans. This type of insurance covers routine eye examinations and appropriate treatment that is provided.